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IN THE HIGH COURT OF DELHI AT NEW DELHI

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Judgment Reserved on: 16^th October, 2015

Judgment Delivered on: 02^nd November, 2015

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WP(C) 7201/2015

M/S SHREE GEE ENTERPRISES

.... Petitioner

versus

UNION OF INDIA AND ANR

.... Respondents

Advocates who appeared in this case:

For the Petitioner

:

Mr Rohit Agarwal and Ms Malavika Lal

For the Respondents :

Ms Suparna Srivastava with Mr Neelmani Pant for

Respondent No. 1 /Union of India.

Mr V.M.Koura with Mr Sirish Kumar for Respondent

No. 2.

Mr T.N.Saxena for Respondent No. 3.

CORAM:-

HON’BLE MR JUSTICE BADAR DURREZ AHMED

HON’BLE MR JUSTICE SANJEEV SACHDEVA

JUDGMENT

SANJEEV SACHDEVA, J

WP(C) 7201/2015 & CM No.13229/2015(stay)

1.

The petitioner has filed the present petition challenging the

award of tender by Respondent No. 2/Indian Oil Corporation Limited

to Respondent No. 3/M/s. Bansal Brothers. The contention of the

petitioner is that the Respondent No. 2 has awarded the contract to the

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Respondent No. 3 applying clause (vii) of the tender document of the

Notice Inviting Tender (NIT), which provides for giving preference to

Micro and Small Enterprises (MSEs).

2.

The contention of the petitioner is that the tender envisaged a

“works contract” and “works contract” simpliciter is not covered

under the Micro, Small and Medium Enterprises (MSME)

Procurement Policy 2012 of the Respondent No. 1 and as such, the

preference given to the Respondent No. 3 was invalid and the contract

could not have been awarded to the Respondent No. 3.

3.

Respondent No. 2 had issued the Notice Inviting e-tender (NIT

for short) for first phase of replacement of sewer, waste water lines of

residential flats of Indian Oil Nagar, site-I and II, Sector-55, Noida.

Clause (iii) of the NIT stipulated that the work was indivisible and

shall be awarded to single successful bidder. Clause (vii) of the NIT

stipulated as under:-

(vii) IOCL will allow Purchase Preference to

NSIC/MSE/IOCL JVs etc as per applicable

Govt./Company Policy, for detail refer Instruction

to Bidders (ITB) section of Tender Document.

4.

As per the petitioner, Respondent No. 2 received only two bids;

one bid from the petitioner and the second bid from the Respondent

No. 3. Both the bidders were declared technically qualified after the

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opening of the technical bids. As the financial bids of the petitioner

and the Respondent No. 3 were not disclosed by the Respondent No.

2, the petitioner made inquiries from the Respondent No. 2 about the

same. In response to the queries raised by the petitioner, the

Respondent No. 2 informed the petitioner that benefit of the Public

Procurement Policy for MSE dated 26.03.2012 (hereinafter referred to

as the policy) was given to the Respondent No. 3, who was an MSE

bidder.

5.

The petitioner has filed the present petition challenging the

preference given by the Respondent No. 2 to the Respondent No. 3 as

per the Public Procurement Policy for MSEs 2012. The grievance of

the petitioner is two-fold. First of all, the subject contract was a

works contract and the Policy was not applicable to works contracts,

The policy was only meant for goods produced and services rendered

by MSEs. Secondly, it was contended that only 20% of the contract

could be given to an MSE and since the contract was indivisible, the

entire contract could not have been awarded to the Respondent No. 3

by applying the MSE policy.

6.

Respondent No. 2 sought to defend its action by contending that

it is bound by the procurement targets fixed under the Policy issued by

the Respondent No. 1. It is further contended that in terms of the

Policy, the public sector undertakings are bound to procure a

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minimum of 20% of their annual value of goods and services from

MSME. It is contended that the Respondent No. 2 is primarily

engaged in refining crude oil, distribution